As California wrestles with a horrendous budget deficit, the axe hangs over almost every area of state spending, from welfare to education. But there is one activity set for healthy growth: stem cell research.

Dozens of new laboratories are being fitted out and hundreds of scientists recruited. The California Institute of Regenerative Medicine – set up in 2004, when a referendum ap- proved $3bn of state spending on the research – is moving ahead after delays caused by legal challenges and uncertainties over selling the state bonds that will fund it. About $1bn (€700m, ￡600m) has been committed in research grants and spending on labs and other infrastructure, according to Alan Trounson, CIRM president.

The Golden State provides the most striking example of a growing wave of public spending in the US and globally on stem cells, which many scientists see as the foundation of a new type of medicine in which failing or damaged body tissue will be replaced with fresh young cells. Held back for years by political opposition and lack of funding, stem cell research – which supporters say holds the key to curing diseases ranging from diabetes and heart failure to Parkinson's and spinal injury – is powering ahead.